FOMC Didn't Help Bonds Continue to Defy Gravity

By Rod David  OCT 24, 2012 3:35 PM

Take a look at the intraday action in commodities.

 


The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today’s Highlight: If the FOMC triggered any reaction on Wednesday at all, it was on bonds, which had bounced optimistically on Tuesday. All of that bounce was returned Wednesday. Returning all of the recent rally may not be far behind.

Dollar Basket
Dec Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Ranging narrowly sideways Wednesday essentially fulfilled expectations that a trending attempt would have failed. It also makes trending more difficult in the near-term.

Eurodollar
Dec Contract EC; (NYSEARCA:FXE)
Wednesday’s sideways ranging held 1.2955 support without closing under it to trigger a new downleg.

Gold
Dec Contract GC; (NYSEARCA:GLD)
Tuesday’s narrow ranging below prior lows was not rejected immediately Wednesday, which would have formed an island. Wednesday only extended under Tuesday’s 1705.00 lows, down to 1699.00. The drop could target 1673.00 if 1727.00 were not recovered without further delay.

Silver
Dec Contract SI; (NYSEARCA:SLV)
Instead of recovering 32.00 Wednesday to trigger a rally back to 33.00, the open’s blip-up to 32.00 reacted down to fresh lows under 31.55. That all but requires extending the drop to 30.75 so long as 32.00 is not recovered first.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Testing and holding the 148-00 corrective bounce target Tuesday allowed another reaction down on Wednesday. But unlike Monday’s premature dip, now sellers can gain traction by closing under 147-08, initially targeting a retest of 146-06 and 145-00.

Crude Oil
Dec Contract CL; (NYSEARCA:USO)
Tuesday’s test of the 87.00 target was not rejected Wednesday, as lower lows were probed intraday down to 84.94, barely recovering back up to Tuesday’s 85.69 low.

Natural Gas
Nov Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
The 3.55 buy signal that was not triggered Tuesday pushed price back down Wednesday, testing critical 3.45 support ahead of Thursday’s EIA report.

Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
No positions in stocks mentioned.

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